Coyote Copper Mines Inc. press release

Hemlo Mining Corp. Reports Second Quarter 2026 Financial and Operating Results

2026-08-11

TSXV - TSX Venture Exchange · Canada · Corporate Finance

PR Newswire

TORONTO, Aug. 11, 2026/PRNewswire/ -- Hemlo Mining Corp. (TSX: HMMC) (OTCQX: HMMCF) ("Hemlo" or the "Company") is pleased to announce its financial and operating results for the second quarter ended June 30, 2026 ("Q2" or "Q2 2026"). The Company will host a conference call to discuss second quarter 2026 results on Wednesday, August 12, 2026 at 11:00 AM Eastern Time.

(All amounts expressed in U.S. dollars unless otherwise stated)

Jason Kosec, President, CEO & Director of Hemlo Mining, commented: "Q2 demonstrated continued execution against our strategic priorities as we advanced our owner-operator transition and strengthened the operational foundations required to support higher long-term production rates. We delivered attributable gold production of 25,188 ounces, generating revenue of $142.5 million and net income of $31.0 million, or $0.10 per share. During the quarter, production was in line with our expectations while operational fundamentals strengthened meaningfully, positioning the business for improved performance as newly developed mining areas enter the production sequence. We also achieved several important strategic milestones, including a 34% increase in Measured & Indicated Mineral Resources, graduation to the Toronto Stock Exchange, completion of an Impact Benefit Agreement with Biigtigong Nishnaabeg, and three consecutive years without a lost-time injury. The progress we have made during the first half of 2026 reinforces our confidence in the significant long-term value creation opportunity at Hemlo."

Second Quarter Highlights:

Financial Highlights

Revenue for the three months ended June 30, 2026 was $142.5 million, mainly from 32,425 gold ounces sold at an average realized price1of $4,467 per ounce. Revenue for the six months ended June 30, 2026 was $328.8 million mainly from 71,110 gold ounces sold at an average realized price1of $4,710 per ounce. Net income for the three months ended June 30, 2026 was $31.0 million, or $0.10 per share, and adjusted net income1was $27.3 million, or $0.09 per share1. Net income for the six months ended June 30, 2026 was $53.1 million, or $0.18 per share, and adjusted net income1was $76.0 million, or $0.26 per share1. Earnings before interest, taxes, depreciation and amortization ("EBITDA")1for the three months ended June 30, 2026 was $77.2 million. EBITDA1for the six months ended June 30, 2026 was $163.8 million. Cash generated from operating activities for the three and six months ended June 30, 2026 was $35.6 million and $123.5 million, respectively. As at June 30, 2026, the Company held cash of $130.2 million.

| | | 1This is a non-IFRS measure. For further information, refer to the "Non-IFRS Measures" section of this news release. |

Operating Highlights

Attributable gold2production for the three and six months ended June 30, 2026 totalled 25,188 and 54,887 ounces of gold, respectively, at average recoveries of 94.3% and 95.0%, respectively. Attributable gold2sold for the three and six months ended June 30, 2026 totalled 27,858 and 59,910 ounces of gold, respectively, supplemented by finished goods at the beginning of each period. Cost of sales for the three and six months ended June 30, 2026 were $96.8 million and $210.0 million, respectively. Site attributable cash cost per ounce sold3for the three and six months ended June 30, 2026 was $1,880 and $1,615, respectively, and all-in sustaining cost ("AISC") per ounce sold3 for the three and six months ended June 30, 2026 was $2,561 and $2,157, respectively. Continued strong safety and environmental performance in the second quarter, recording no environmental non-compliance and no lost-time injuries ("LTI") while achieving three consecutive years without a LTI. Strengthened operational metrics during the quarter, including development metres increased 42%, longhole production drilling rose 65%, total tonnes moved improved 5%, and ore milled increased 7% compared with the first quarter of 2026. Established several new daily operating records in the second quarter of 2026, including 1,051 metres of longhole drilling, 46 metres of lateral development, 4,800 tonnes of paste backfill placed, 7,118 tonnes of ore hoisted, and 5,035 tonnes of ore processed. Received seven additional mobile equipment units during the quarter, bringing total deliveries to 10 of 21 planned units. Announced an updated Mineral Resource Estimate ("MRE") demonstrating a 34% increase from the 2025 National Instrument 43-101, _Standards of Disclosure for Mineral Projects_("NI 43-101") Technical Report (the "2025 Report"), adding 1.2 million ounces of gold, in Measured and Indicated ("M&I") Mineral Resources (100% basis). Continued to advance the 130,000 metre exploration drilling program with initial results from the South-Rim Zone that support the definition of a newly recognized, high-grade mineralized domain.

Corporate Highlights

Common shares commenced trading on the OTCQX® Best Market ("OTCQX") in the United States under the symbol "HMMCF" and became eligible for electronic clearing and settlement in the United States through the Depository Trust Company ("DTC"). Completed an Impact Benefit Agreement ("IBA") with Biigtigong Nishnaabeg ("BN") in relation to the Hemlo Mine. Graduated to the Toronto Stock Exchange ("TSX") from the TSX Venture Exchange ("TSXV"). Appointed Eva Koci as an independent director on the Company's Board of Directors ("Board"), increasing the Board to seven directors, a majority of whom are independent.

| _ | | 2Attributable gold is calculated as 100% of gold from Williams and 50% of gold from Interlake. | | 3This is a non-IFRS measure. For further information, refer to the "Non-IFRS Measures" section of this news release. |

Operating and Financial Highlights

| | | Three months

ended | Three months

ended | Six months

ended | | Hemlo Mine | Unit | June 30, 2026 | March 31, 2026 | June 30, 2026 | | Williams | | | | | | Ore mined | 000t | 266 | 229 | 495 | | Waste mined | 000t | 68 | 45 | 113 | | Total mined | 000t | 334 | 274 | 608 | | Ore processed | 000t | 283 | 230 | 513 | | Average grade | g/t Au | 2.53 | 3.37 | 2.90 | | Gold produced | oz. | 22,516 | 24,635 | 47,151 | | Sustaining capital expenditures1 | $'000s | 17,048 | 11,018 | 28,066 | | Growth capital expenditures1 | $'000s | 6,857 | 7,688 | 14,545 | | | | | | | | _Interlake__2_ | | | | | | Ore mined2 | 000t | 59 | 91 | 150 | | Waste mined2 | 000t | 3 | 11 | 14 | | Total mined2 | 000t | 62 | 102 | 164 | | Ore processed2 | 000t | 61 | 92 | 153 | | Average grade2 | g/t Au | 3.05 | 3.51 | 3.33 | | Gold produced2 | oz. | 5,342 | 10,129 | 15,471 | | Sustaining capital expenditures1,2 | $'000s | 370 | 1,367 | 1,737 | | | | | | | | Total ore processed | 000t | 344 | 322 | 666 | | Recovery | % | 94.3 | 95.6 | 95.0 | | Total gold produced | oz. | 27,858 | 34,764 | 62,622 | | Total gold sold | oz. | 32,425 | 38,685 | 71,110 | | | | | | | | Attributable gold produced3 | oz. | 25,188 | 29,699 | 54,887 | | Attributable gold sold3 | oz. | 27,858 | 32,052 | 59,910 | | | | | | | | Unit Cost Analysis | | | | | | Average realized price1 | $/oz. sold | 4,467 | 4,923 | 4,710 | | Mining | $/t mined | 105.60 | 113.15 | 109.28 | | Milling | $/t milled | 25.50 | 32.81 | 29.03 | | Minesite G&A | $/t milled | 26.84 | 20.75 | 23.90 | | | | | | | | Cost of sales (100%) | $/oz. sold | 2,987 | 2,924 | 2,953 | | Total site cash cost (Attributable)1 | $/oz. sold | 1,880 | 1,385 | 1,615 | | Total site AISC (Attributable)1 | $/oz. sold | 2,561 | 1,805 | 2,157 |

| 1. | This is a non-IFRS measure. For further information, refer to the "Non-IFRS Measures" section of this news release. | | 2. | Operating statistics are presented on a 100% basis. The Interlake claims are subject to a 50% net profits interest ("NPI") royalty with Franco-Nevada Corporation. | | 3. | Attributable gold is calculated as 100% of gold from Williams and 50% of gold from Interlake. |

| | | Three months ended June 30, | Six months ended June 30, | | | | | | | 2025 | | 2025 | | Summary of financial information | Unit | 2026 | (restated)3 | 2026 | (restated)3 | | Gold produced (100%) | oz. | 27,858 | — | 62,622 | — | | Gold produced (attributable)1 | oz. | 25,188 | — | 54,887 | — | | | | | | | | | Gold sold (100%) | oz. | 32,425 | — | 71,110 | — | | Gold sold (attributable)1 | oz. | 27,858 | — | 59,910 | — | | Average realized price2 | $/oz. sold | 4,467 | — | 4,710 | — | | | | | | | | | Revenue | $'000s | 142,499 | — | 328,764 | — | | Cost of sales | $'000s | 96,842 | — | 209,971 | — | | General and administrative expenses | $'000s | 6,972 | 36 | 14,879 | 49 | | Exploration and evaluation expenditures | $'000s | 204 | — | 275 | — | | Foreign exchange losses (gains) | $'000s | 226 | (1) | (551) | (1) | | Other (income) expenses | $'000s | (12,066) | 32 | (4,320) | 32 | | Income (loss) from operations | $'000s | 50,321 | (67) | 108,510 | (80) | | Finance costs, net | $'000s | 7,207 | — | 19,637 | — | | Income (loss) before income taxes | $'000s | 43,114 | (67) | 88,873 | (80) | | Income tax expense | $'000s | 12,112 | — | 35,745 | — | | Net income (loss) | $'000s | 31,002 | (67) | 53,128 | (80) | | Basic earnings (loss) per share | $/share | 0.10 | (0.02) | 0.18 | (0.02) | | Adjusted net income (loss)2 | $'000s | 27,292 | (67) | 76,040 | (80) | | Adjusted basic earnings (loss) per share2 | $/share | 0.09 | (0.02) | 0.26 | (0.02) | | | | | | | | | Cash generated from (used in) operating activities | $'000s | 35,648 | (61) | 123,547 | (86) | | Cash flow generated from (used in) operating activities before working capital changes2 | $'000s | 34,308 | (67) | 88,735 | (80) | | Cash used in investing activities | $'000s | 24,359 | — | 40,766 | — |

| 1. | Attributable gold is calculated as 100% of gold from Williams and 50% of gold from Interlake. | | 2. | This is a non-IFRS measure. For further information, refer to the "Non-IFRS Measures" section of this news release. | | 3. | As at December 31, 2025, the Company changed its presentation currency from Canadian dollars to U.S. dollars. The change in presentation currency is an accounting policy change and has been applied retrospectively with comparative figures restated for all periods presented. |

| | | As at June 30, | As at December 31, | | Financial position | Unit | 2026 | 2025 | | Cash | $'000s | 130,152 | 131,956 | | Net debt1 | $'000s | 19,848 | 93,044 | | Working capital | $'000s | 51,075 | 110,688 |

| 1. | This is a non-IFRS measure. For further information, refer to the "Non-IFRS Measures" section of this news release. |

Financial Overview

Revenue for the three months ended June 30, 2026 was $142.5 million, mainly from 32,425 gold ounces sold at an average realized price4of $4,467 per ounce. Revenue decreased compared to the first quarter of 2026 due to 6,260 fewer gold ounces sold and $456 per ounce decrease in average realized price4.

Cost of sales for the three months ended June 30, 2026 was $96.8 million. Cost of sales decreased compared to the first quarter of 2026 mainly due to lower royalties expense of $16.3 million from lower revenues as well as lower gold ounces sold from the Interlake claims which are subject to a 50% net profit interest royalty ("NPI") with Franco-Nevada Corporation ("Franco-Nevada").

Other income for the three months ended June 30, 2026 was $12.1 million, mainly comprised of gains of $20.7 million from change in fair value of contingent consideration, and gains of $7.4 million from change in fair value of gold derivative financial instruments, partially offset by $15.8 million paid within the terms of an IBA with one of the First Nations in relation to the Hemlo Mine.

Finance costs, net for the three months ended June 30, 2026 was $7.2 million. Finance cost decreased compared to the first quarter of 2026 mainly due to repayment of the Revolving Credit Facility in March 2026 resulting in a decrease of interest expense of $2.6 million as well as reduction in accretion of the Precious Metals Purchase Agreement with Wheaton Precious Metals Corp. ("Wheaton") of $3.0 million.

Income tax expense for the three months ended June 30, 2026 was $12.1 million. Income tax expense decreased compared to the first quarter of 2026 mainly due to lower revenues. The decrease in effective tax rate in the second quarter of 2026 compared to the first quarter of 2026 was primarily driven by non-taxability of $20.7 million gain on change in fair value of Contingent Consideration in the second quarter of 2026 compared to the non-deductibility of $8.4 million loss on change in fair value of Contingent Consideration in the first quarter of 2026.

Net income for the three months ended June 30, 2026 was $31.0 million, an increase of $8.9 million compared to the first quarter of 2026, mainly due to lower income tax expense of $11.5 million, increase in gain on change in fair value of Contingent Consideration of $29.1 million, increase in gain on change in fair value of gold derivative financial instruments of $6.7 million, lower finance cost of $5.5 million mainly driven by lower interest expense and gold stream accretion, partially offset by lower gross profit5of $27.5 million from lower gold ounces sold and average realized price per ounce5and $15.8 million paid in relation to an IBA.

Cash generated from operating activities for the three months ended June 30, 2026 was $35.6 million, a decrease of $52.3 million compared to the first quarter of 2026. The decrease was mainly driven by lower revenues and timing of cash proceeds of $14.8 million from 3,721 gold ounces sold at the end of the second quarter of 2026.

Cash used in investing activities for the three months ended June 30, 2026 was $24.4 million, mainly related to sustaining capital expenditures6of $17.5 million driven by spending on underground mine development and infrastructure, mining fleet additions and tailings storage facility, with growth capital expenditures6of $6.9 million largely reflecting mining fleet additions and exploration drilling. Increase in cash used in investing activities compared to the first quarter of 2026 was mainly due to timing of payments related to capital expenditures and $4.6 million in cash consideration recovered due to the settlement of the working capital adjustment from the acquisition of the Hemlo Mine (the "Hemlo Acquisition").

| | | 4This is a non-IFRS measure. For further information, refer to the "Non-IFRS Measures" section of this news release. | | 5Calculated as revenue less cost of sales as disclosed in the interim condensed consolidated statements of income (loss). | | 6This is a non-IFRS measure. For further information, refer to the "Non-IFRS Measures" section of this news release. |

Operations Overview

Safety and Workforce

The Hemlo Mine continued its strong safety and environmental performance in the second quarter of 2026, recording no environmental non-compliance and no LTIs while achieving three consecutive years without a LTI.

The second quarter of 2026 marked Hemlo's first full quarter operating as an owner-operator, representing the first time the Hemlo Mine has operated under this model since 2019. Recruiting and training efforts progressed well during the second quarter of 2026, and the Hemlo Mine now employs 529 full-time employees alongside 265 contractors, approximately 75% of whom are from local communities.

Mining and Processing

During the second quarter of 2026, mining rates at the Hemlo Mine increased modestly, resulting in 396,000 total tonnes mined, including 325,000 ore tonnes and 71,000 waste tonnes.

The Hemlo Mine processed 344,000 tonnes of ore in the second quarter of 2026, an increase of 7% from 322,000 tonnes of ore in the first quarter of 2026, and 666,000 tonnes of ore for the six months ended June 30, 2026. This equates to average throughput of approximately 3,800 tonnes per day in the second quarter of 2026, an increase from approximately 3,600 tonnes per day in the first quarter of 2026, representing a modest utilization of the processing plant's 10,000 tonne-per-day nameplate capacity. During the second quarter of 2026, the mill set a new daily processing record of 5,035 tonnes of ore, underscoring the additional capacity available within the existing processing circuit. Recovery for the second quarter of 2026 was 94.3%, compared with 95.6% in the first quarter of 2026 and 95.0% for the six months ended June 30, 2026, reflecting the change in ore blend as lower-grade development tonnes from Williams and Interlake contributed a larger share of mill feed.

The Hemlo Mine produced 25,188 attributable gold7ounces in the second quarter of 2026, a decrease of 4,511 ounces compared to 29,699 attributable gold7ounces in the first quarter of 2026. The decline was primarily driven by a planned rebuild of one of the three underground crushers, which required all tonnage to be diverted to the remaining two crushers, together with a planned transition from a top-down to bottom-up mining sequence across portions of the Williams and Interlake zones to reduce waste handling and improve long-term mining efficiency. The sequencing change temporarily delayed access to higher-grade stopes and increased the proportion of lower-grade development ore processed during the second quarter of 2026, reducing average mill feed grade to 2.53 grams per tonne ("g/t") of gold ("Au") at Williams and 3.05 g/t Au at Interlake compared to 3.37 g/t Au and 3.51 g/t Au, respectively, in the first quarter of 2026. However, because the incremental lower-grade tonnes were sourced from wholly-owned areas of the Hemlo Mine, attributable gold production represented a higher percentage of total gold production than in the first quarter of 2026.

Underlying operating metrics improved materially during the second quarter of 2026, notwithstanding the lower grade profile. Development metres increased 42%, longhole production drilling increased 65%, total tonnes moved increased 5%, and ore milled increased 7% relative to the first quarter of 2026. Management expects these leading indicators to support improved production in future periods as newly developed mining areas are brought into the production sequence.

Seven additional mobile equipment units were delivered during the second quarter of 2026, including three bolters, one scissor lift, one 45-tonne haul truck, and two 11-cubic-yard scooptrams, bringing the fleet to 10 of 21 planned new units on site for 2026. Together with planned ventilation upgrades expected to improve blast re-entry times in the second half of 2026, these investments are expected to support higher development rates and greater production flexibility.

During the quarter, the Hemlo Mine also successfully managed a significant spring thaw and snow melt without operational disruption.

Operating Costs

Mining unit costs, before capitalized development costs, decreased to $105.60 per tonne mined in the second quarter of 2026, from $113.15 per tonne in the first quarter of 2026, while milling costs decreased to $25.50 per tonne milled from $32.81 per tonne, reflecting higher mining and processing volumes. Mine site G&A increased to $26.84 per tonne milled from $20.75 per tonne, primarily reflecting the continued build-out of the owner-operator workforce. Attributable gold8sold for the three months ended June 30, 2026 was 27,858 ounces, resulting in cash costs per ounce sold9of $1,880 and attributable AISC per ounce sold9of $2,561 compared with $1,385 and $1,805, respectively, in the first quarter of 2026. The increases primarily reflect lower attributable gold8ounces sold, over which fixed and semi-fixed costs were spread, continued investment in the mobile fleet and owner-operator transition, and additional labour to support the planned ramp-up to 4,800 tonnes per day by the end of 2026. Operating costs also continued to be affected by the highly competitive market for skilled labour, elevated consumable prices, including diesel fuel, and the impact of tariffs on parts and equipment.

Given the Hemlo Mine's processing plant spare capacity relative to nameplate throughput, unit milling costs are expected to decline as underground production increases, reflecting the ability to spread the plant's largely fixed cost base over a greater number of processed tonnes.